Many commercial real estate investors in Utah consider how much risk comes with a particular investment opportunity before making the decision to invest. Investing in any form of commercial real estate involves some level of risk. Yet, there are certain types of commercial real estate investments that history has shown to be less risky than others.
Per the Motley Fool, the self-storage industry is one such investment opportunity. There are several reasons you may want to consider investing in a self-storage facility or business.
Why investing in self-storage carries minimal risk
Research has shown repeatedly that self-storage facilities typically remain profitable even when the economy is weak. At the national level, most self-storage facilities maintain occupancy rates that exceed 90%. This is likely due to the fact that, during strong economies, people tend to make more purchases, leading to a need for more storage space. Yet, in weak economies, people are more prone to moving or downsizing, which also increases the need for storage units.
What lowers risks even more
While investing in self-storage carries minimal risk in comparison to investing in many other types of commercial real estate, there are certain things you might do to reduce risks even further. Doing your research before selecting your location is one such step. Self-storage facilities are more profitable when they operate in high-traffic areas, but you need to check with zoning laws to see if an address you have your eye on is fit for commercial use.
While there are no guarantees when it comes to investing in commercial real estate, many who choose to invest in self-storage find that their investments pay off significantly in the long run.